[Market's Eye] "AI is Now in Its 'Summer', It's Not Too Late"

Mirae Asset Management Publishes 'AI Investment ETF Guidebook'... "From AI Value Chain to Company Analysis"
Jung Eui-hyun, Head of ETF Management Team, "Expansion of Demand with AI-Equipped Small Devices"

"The era of widespread adoption of small devices equipped with artificial intelligence (AI) has truly begun. Rather than viewing this as a peak, it is better to see it as the 'early summer when it starts getting much hotter."

Jeong Eui-hyun, Head of ETF Management Team at Mirae Asset Global Investments. Photo by Mirae Asset Global Investments

Jung Eui-hyun, head of the ETF management team at Mirae Asset Global Investments, expressed this view in an interview with Asia Economy regarding concerns about an AI peak.

He was confident about the AI industry. Jung said, "From this year, the expansion of adoption centered on Small Language Models (SLLM) is becoming apparent. These models, which offer fast response times and can be customized for individual users, will bring AI into everyday life." He added, "Earlier this year, Samsung Electronics introduced Galaxy AI, and Apple Intelligence is also expected soon, so it seems the AI industry still has much more to show."

He explained that the introduction of a new index in the U.S. also plays a role. Jung said, "The Nasdaq Stock Market in the U.S. announced a new Philadelphia AI Semiconductor Index focusing on AI semiconductor companies, about 30 years after launching the Philadelphia Semiconductor Index in 1993. As AI’s computing power and training volume increase, emergent properties appear, and we may witness a rapid change in investment trends due to AI."

His confidence stems from Mirae Asset’s recently published 'AI Investment Exchange-Traded Fund (ETF) Guidebook' released last month. The ETF guidebook was created with the participation of Jung Eui-hyun, his team members, and marketing staff, dedicating over two months of time and effort. It covers trends in the AI industry and directions for its development. The 53-page guidebook explains LLM (Large Language Model) technology and discusses the utilization and scalability of AI technology. It also analyzes the AI technology status of 15 major companies related to AI.

Mirae Asset Global Investments divides the AI value chain into five stages: AI semiconductors, network storage, devices, and software sectors. Jung explained, "I wanted to detail how the AI value chain industry connects from start to finish and introduce the business status and technological capabilities of key companies in each segment."

Another feature of this guidebook is its in-depth analysis of individual companies. He said, "Typical reports often focus on future performance, i.e., numbers, but there is surprisingly little information on 'why they are successful' and 'what technologies they possess.' We made an effort to convey this to investors."

Additionally, the guidebook introduces TIGER ETFs linked to companies, allowing investment in the AI value chain tailored to each company. Mirae Asset manages a total of 19 AI-related ETFs, with net assets of 8.4 trillion KRW as of the end of October, the largest scale among domestic asset managers. He emphasized, "We did not just increase the number of ETFs but approached investors through systematic classification within the AI industry, such as fabless and TSMC foundry value chain ETFs."

He also recommended AI ETFs based on investor personality types. Jung advised, "For conservative investors, investing in big tech companies may be better in terms of volatility. For those who prefer aggressive investments, investing in ETFs focused on infrastructure or on-device sectors that interest them would be appropriate."

The ETF investment guidebook is a publication Mirae Asset has been releasing since last year to deliver information that ETF investors need to know more easily. So far, they have published 'ETF Pension Investment Guidebook Starting with TIGER,' 'Active ETF and Brokerage ISA Investment Guidebook,' 'U.S. Investment ETF Guidebook,' and 'U.S. Leveraged ETF Guidebook,' among others.

Jung Eui-hyun explained that the main focus of this guidebook was readability. The actual book includes more graphics rather than just text to help investors understand easily. He said, "Since we had to focus on explaining the AI value chain, I was concerned that the volume might become too long and reduce readability and interest. We concentrated on condensing the core content to enhance communication with investors."

Mirae Asset plans to continue publishing guidebooks. While previous editions focused on the U.S. market, the next focus will be emerging markets. He emphasized, "Looking back at the guidebooks we have released so far, many were U.S.-centric. We plan to expand to China and emerging countries to broaden investors’ perspectives."

They also plan to update existing guidebooks to provide new perspectives. He explained, "The first guidebook we released was on secondary batteries, but market conditions have changed significantly, including deteriorating data. We plan to revise this and update it by the end of this year or next year."